As global tuition rates continue to rise and the economy languishes, the cost of obtaining an MBA has never been greater. Is it worth it?
This is the real key - if your long-term career goal is to run a factory or to work in politics, for example, you will likely not need an MBA. Take some time to think carefully about your future. Look at some of the professionals whom you look up to. The people you are modeling yourself after. Do they have MBAs? Did they need them to achieve their goals? Perhaps yes, perhaps no. Just remember, the MBA (unlike a Law Degree or Medical Degree, for instance) will not actually qualify you to do anything in particular. You will need to be creative out of school to land a job. (Doctors, in contrast, are guaranteed jobs once they get into med school.) So before you decide to go to business school, do some research to gauge whether or not you really need the degree. After all, the most successful businessmen (Steve Jobs, Michael Dell, etc.) didn’t even graduate from college, let alone business school.
The bottom line is this: attending business school is very expensive. And anyone who disagrees with this statement is not doing a careful job with his MBA arithmetic! Some folks will be lucky enough to have their companies pay for their MBA tuition. That is a huge relief for them, but there are still countless costs. A full-time, two-year program will cost upwards of $150,000 - only half of which is devoted to tuition! There will be $75,000 in living expenses (depending on the city you live in, lifestyle you choose, etc.) This doesn’t begin to account for the income you will lose over the two years when you are in school, let alone the chance that you don’t get a job when you graduate. So, maybe build in 1-6 months of unemployment post-graduation to your calculations to be safe. Can you afford to give up a couple hundred grand? Many folks can—but some cannot.
As we have discussed, some people are willing to give up the $100,000 or $200,000 that we have described above. Why? Well, because they are thinking about the long term. If you have made an informed decision about going to business school, you should earn that “lost” income back in a relatively short time. A great two-year program should put you on a fast track to make a good deal of money. Perhaps only $10K or $20K more in the first year or two upon graduation, but in the LONGER term you should be making 10X or even 100X that much. If at business school, for example, you meet some very smart peers and launch a company, that $100K that you have “lost” becomes irrelevant.
There has never been a more robust set of MBA offerings available to applicants. There are full-time programs, part-time programs, executive programs (EMBA), professional programs, international programs, online programs, and countless hybrids of all these (and then some more). Are you considering ALL of these options as you consider getting your MBA? You should be. Full-time programs are best for students who tend to be a bit younger (ages 22-30), and in the US, the programs last two years. In Europe, full-time programs can be 12-18 months long. Executive programs tend to be for middle managers looking for an extra boost in their careers. Part-time programs can be very flexible and draw a very diverse group of students. Which program is right for you? Well, it all depends on your stage in life. If you cannot afford to leave work for two years (due to personal reasons, for example) then a full-time program may not be right for you. If you have been laid off and are eager to sit out this economic downturn, then a full-time program may be perfect for you. If you are younger but still eager to earn an MBA (not an executive MBA) while maintaining your job, then a part-time program could do the trick. So do your research, folks; there have never been more kinds of MBA programs out there for your choosing…
There is no doubting the fact that it’s expensive to attend business school. Schools can charge from $20k, $80k, or even up to $160k and everything in between. However, before you give up and stop reading, let’s slow down a bit. For US applicants there are many options for loans - both private and some that are federally subsidized. My federal loans, which I will be paying off for the next 20 years or so, are locked at a rate of 2.25%. Not bad, eh?
As you consider MBA programs, dig deep into financing options. There is NO better way to leverage yourself than your education, and good MBA programs make it VERY easy to obtain loans. It can be harder for international applicants, and could be at schools that are not well-regarded locally. But many MBA applicants will not ever have to write the huge checks required to cover their expenses.
Given my line of work, every day I am inundated by Google ads for “MBA without GMAT,” and “International Accredited MBA for $49.95” etc. There are no shortcuts here. Remember, you get what you pay for. And there are countless “Accreditation Agencies” out there looking to make a dollar. Any “school” can be thrown up in a matter of weeks, and can start taking the money of unsuspecting applicants. Do not fall for these scams! While some “distance learning” and “online MBA” programs are decent, many are not. Be sure to do your research, and remember—the next time you see an ad for a school you have never heard of, offering something that is too good to be true, be very careful. The education space is a HUGE, for-profit business. Many “schools” out there are little more than a handful of dishonest “entrepreneurs” trying to turn a quick buck.
Many of us have been through the MBA journey before. You should never feel as though you are on your own, trying to figure things out without any support. You should be reaching out to any number of possible allies and supporters: friends, family, coworkers, schools, professors, admissions consultants, etc. Every MBA program (even in the highest echelons of “MBA-dom”) will LOVE to speak with you on the phone, send you their materials, and direct you to their contacts, student admissions advisers, etc. You should never feel alone in your MBA journey - there are countless resources out there for you. All of which will cost you NOTHING. Reach out to your support system, and develop a plan for the future, my friends.
When deciding whether to obtain an MBA, there are many factors to consider, including whether you really need one; what the best reasons are to go; and, of course, where you should attend given the option. If you do your research carefully, an MBA can be a transformational experience. But as you make this important decision, be careful not to fall for the many pitfalls that await you along the way.
More expert advice about Graduate Programs
Photo Credits: Graduated! by Flickr: ralph and jenny; Check Man, Cross Man and Jump Man © ioannis kounadeas - Fotolia.com